Milan, Italy – September 19, 2008 - Newron Pharmaceuticals S.p.A. (“Newron”), a research and development company focused on novel CNS and pain therapies, today announced its financial results for the half year ended June 30, 2008.
Highlights • Exciting phase II results with ralfinamide in Neuropathic Low Back Pain (NLBP) o significant and clinically relevant improvement in VAS/Likert scales: mean change and responder rates / Patient rated Activities of Daily Living / Disruption of Sleep o NLBP: prevalence of almost 8%; accounts for about 60% of all neuropathic pain diagnoses - no drugs approved to date o future development plans discussed with major health authorities • Safinamide patent protection: EPO grant patent extending the use of safinamide plus levodopa therapy in Parkinson’s disease until 2024 in Europe • Completion of patient enrolment in phase III clinical trial with safinamide in mid-to-late stage Parkinson’s disease • Acquisition of Hunter-Fleming Ltd. • Data Safety and Monitoring Board recommends continuation of phase II study for HF0220 in patients with Alzheimer’s disease • Appointment of senior industry experts as non-executive Members of the Board of Directors • Inclusion into SWX Swiss Performance Index • Inclusion into SWX SXI indices* * post end of reporting period
Ralfinamide – focus on Neuropathic Low Back Pain, indication with no approved drugs offering blockbuster potential On April 15, 2008, Newron presented the results from the detailed analyses of the Phase II trial of ralfinamide in patients with neuropathic pain at the AAN** 60th Annual Meeting in Chicago. In the overall study population ralfinamide was well tolerated and safe, with reported side effects comparable to placebo. More importantly, the compound showed statistically significant superiority compared with placebo on the mean change in the patient-rated Visual Analog Scale (VAS) and Likert Scale – measures of the severity of pain. Responder rates were significantly increased compared to placebo and patients experienced a significant improvement in the quality of sleep and their per¬for¬mance of daily activities. ** American Academy of Neurology
A recent review of the trial population indicated that the largest group, 96 out of 272 patients included, was experiencing neuropathic pain due to Nerve Compression/ Nerve Entrapment (NCET). In these patients, treatment with ralfinamide compared to placebo was demonstrated to be highly efficacious as judged by the reduction in the intensity of pain (VAS/Likert), the responder rates, quality of sleep, daily activities and type of pain. As a large number of these patients experience low back pain due to a neuropathic component, the benefits demonstrated suggest that ralfinamide may provide a unique therapeutic benefit for patients with Neuropathic Low Back Pain (NLBP). The company is preparing to start a phase IIb/III trial of three months’ treat¬ment duration in 2008 in patients with NLBP, which could potentially become one of two pivotal trials required for approval in this indication. Currently, no such drugs are approved by health authorities for use in NLBP, an indication with a prevalence of almost 8% of the population, accounting for about 60% of all neuropathic pain diagnoses.
Safinamide – patent position strengthened by granting of patent on combination therapy; first phase III study in mid-to-late stage PD to evaluate efficacy and safety completed enrollment Newron is developing safinamide in conjunction with Merck Serono, which has exclusive worldwide rights to develop, manufacture and commercialize the compound in Parkinson’s disease (PD), Alzheimers’ disease (AD) and other therapeutic applications.
A patent application for the use of safinamide and levodopa in the treatment of PD has been granted by the European Patent Office. This patent will extend protection in Europe to 2024. The same patent was filed in the US.
The safinamide phase III development program was significantly advanced, with Newron announcing in May that patient enrollment was completed in the first phase III clinical trial that will evaluate the efficacy and safety of safinamide as add-on therapy to a stable dose of levodopa for the treatment of patients with mid- to late-stage PD. Topline results of the study should be reported during first quarter 2009.
Newron and Merck Serono plan to start the second phase III study in mid-to-late stage PD patients early next year and to see recruitment of patients in the second Phase III study in early PD patients accelerate.
Hunter-Fleming acquisition – execution of corporate strategy In May 2008, Newron completed the acquisition of Hunter-Fleming Ltd., a private UK bio-pharmaceutical company developing new medicines to treat neurodegenerative and inflammatory disorders. Consistent with Newron’s growth strategy, the acquisition broadens the clinical-stage pipeline, particularly in the area of neuro-inflammation. Upon closing, Hunter-Fleming shareholders in their totality received about 3.1% new Newron shares from a capital increase, with additional milestones of no more than EUR 17 m in new Newron shares, potentially adding to that in the next years. Milestones are strictly linked to development and commercialization success mostly of Hunter-Fleming 0220, the lead compound, currently being developed in Alzheimer’s disease. In the meantime, the integration of the Hunter-Fleming operations has been successfully completed and the remaining team at the Bristol site, together with their counterparts in Basel and Bresso, are evaluating the detailed development plans for all of Newron’s development compounds.
Hunter-Fleming’s lead compound, HF0220, has been shown to reduce amyloid levels in AD transgenic mice, and to be protective in stroke models as well as in murine CIA models. The ongoing phase II safety and tolerability study is exploring biological markers in patients with Alzheimer’s disease.
Luca Benatti, Newron’s CEO, said: “We are excited by the huge potential that ralfinamide offers in Neuropathic Low Back Pain and look forward to seeing the value of the compound increase further in the next months with the start of a phase IIb/III trial and the potential for a licensing transaction. We expect first phase III data of safinamide in mid-to-late stage PD patients and further development steps being implemented. By taking over and integrating Hunter-Fleming, Newron has significantly broadened its clinical pipeline with three new, promising clinical compounds and has acquired further expertise in the area of neuroprotection and inflammation.”
Financial Highlights (IFRS) For the first time, this year’s 6 month financial statements include the results of Newron Suisse SA, a clinical development fully owned subsidiary based in Basel established in autumn 2007, and Hunter Fleming Limited, which has been acquired in May 2008.
Newron’s half-year results show a net loss of EUR 7.3 m, (EUR 4.0 m in 2007), and net cash used in operating activities of EUR -12.7 m, resulting in a cash and cash equivalent position of EUR 47.6 m per June 30, 2008.
Licence income of EUR 1.3 m (2007: EUR 2.2 m) is due to the down-payment received from Merck Serono in October 2006 which is being recognized as revenue over the estimated period required to finalize the development of safinamide. The other income recorded in the first 6 months consists mainly of a research and development tax credit.
Newron has significantly increased its development costs for ralfinamide, NW3509 as well as the new HF compounds, fully in line with the guidance previously given to the financial markets. The development costs increased from EUR 2.8 m from the previous period to EUR 5.1 m in the current period, both net of safinamide development cost as reimbursed by Newron’s partner Merck Serono of EUR 5.6 m (2007) and EUR 5.3 m (current period). In addition, 2008 R&D expense has been reduced by an R&D tax credit of EUR 0.4 m. Therefore, the current period’s gross R&D expense increased to EUR 10.8 m, compared to EUR 8.4 m in 2007, reflecting the broadening of the pipeline and the further development of compounds. Due to the restructuring of Hunter-Fleming, post acquisition, a one-time expense of about EUR 1.3 m has impacted G&A expenses.
